Export Control Through Rose Colored Glasses: Export Regulations Post 9/11 CSURMA Huron Consulting Services LLC. All rights reserved.

Transcription

1 Export Control Through Rose Colored Glasses: Export Regulations Post 9/11 CSURMA 2007 Huron Consulting Services LLC. All rights reserved.

2 Introductions and Expectations Who am I? Who are you? What are we going to cover? What would you like to cover? 2

3 What is Export Control?

4 Export Control Regulations Federal laws that prohibit the unlicensed export of certain commodities or information for reasons of national security or the protection of trade Export controls usually arise for one or more of the following reasons: The nature of the export has actual or potential military applications; The nature of the export has economic protection implications; Concerns about the destination country, organization, or individual; Concerns about the declared end use or user of the export; Concerns about the suspected/potential end use or user of the export Export control regulations provide certain exemptions for universities: Basic Research, Teaching, University, EAR 99, Public Domain Export License 4

5 History of Export Controls International Traffic in Arms Regulation (ITAR) Arms Export Control Act of 1976 Export Administration Regulations (EAR) Export Administration Act of 1969 Office of Foreign Assets Control (OFAC) Successor to FFC (1940) Formally established by President Truman in 1950 The events of 9/11/2001 have resulted in: Heightened concerns about national security; More stringent interpretation of export control laws and regulations; More rigorous enforcement of export control laws and regulations 5

6 Export Control Regulations are Federal and/or International Laws Department of Commerce responsible for enforcement of Export Administration Regulations (EAR) 15 CFR Department of State responsible for the enforcement of International Traffic in Arms Regulations (ITAR) 22 CFR Department of the Treasury, Office of Foreign Assets Control (OFAC) charged with the enforcement and restriction of imports and exports through economic sanctions against certain countries Presidential and National Emergency Authorization United Nations and International Mandates 6

7 Export Regulations Summary EAR ITAR OFAC Covers Dual Use Items Regulates commercial items with potential military applications Covers the goods and technology Includes Deemed Exports Inherently military in nature (designed to kill/defend against death in a military situation) Includes weapons, chemical and biological agents, vehicles, missiles, equipment, all satellites Regulates the transfer of items/services of value to embargoed nations Imposes trade sanctions, and trade and travel embargoes Prohibits payments/providing value to nationals of sanctioned countries and some specified entities/individuals May prohibit travel and other activities with embargoed countries and individuals even when exclusions to EAR/ITAR apply Items and Technology covered are found in the Commerce Control List (CCL) Obligations are determined by Classification; Destination; End-user; End-use and Conduct 10 Prohibitions that require a License or must qualify for an Exception Defense articles, defense services, related technical data on US Munitions List (USML) There are 21 categories requiring a license Strict One Strike and You re Out Policy Voluntary Disclosure is Encouraged Based on US Foreign Policy and National Security Goals Also based on UN and International Mandates in cooperation with Allied Governments List of Sanctioned Countries and Individuals is updated frequently 7

8 What is an Export? An export is any oral, written, electronic or visual disclosure, shipment, transfer or transmission of commodities, technology, information, technical data, assistance or software codes to: anyone outside the U.S. including a U.S. citizen a non-u.s. individual wherever they are (deemed export) a foreign embassy or affiliate An export may be communicated in any of the following ways: Facsimile, or computer data disclosures Telephone or face-to-face discussions Training sessions or tours involving visual inspections 8

9 What is a Deemed Export? A deemed export is the disclosure of a covered technology to a Foreign National who is within the United States: Foreign Nationals in the United States on a valid work visa or student visa are not exempt from this requirement The disclosure has the same effect as an export to the recipient s country of citizenship or residence A deemed export can occur in any of the following ways: Verbal, written, electronic, and/or visual disclosures of information to foreign nationals inside or outside the United States Includes assisting or training foreign nationals, in the US or abroad, in connection with design, development, manufacture, testing, modification, processing, and use of covered items 9

10 Who is a Foreign National? Any individual who is not a United States citizen, or a lawful permanent resident of the United States as defined by 8 U.S.C. 1101(a)(20) or a protected individual as defined by 8 U.S.C. 1324b(a)(3) Any person other than a US citizen, US permanent or temporary legal resident alien, or person in US custody 10

11 How Does This Impact Us?

12 Academic Freedom 1940 Statement of Principles on Academic Freedom and Tenure by the American Association of University Professors and of the Association of American Colleges: The purpose of this statement is to promote public understanding and support of academic freedom and tenure and agreement upon procedures to assure them in colleges and universities. Institutions of higher education are conducted for the common good and not to further the interest of either the individual teacher or the institution as a whole. The common good depends upon the free search for truth and its free exposition UC Office of the President Memorandum October 30,

13 Collaboration and Knowledge Sharing Research may involve the transfer of export controlled items to Foreign Nationals/Foreign Persons or transactions with sanctioned countries Researchers may develop, receive or use export controlled data, materials, equipment, software, and technology/technical data Research may involve sanctioned/embargoed country Foreign Nationals/Foreign Persons or foreign travel Sponsor indicates that export-controlled information or technology will be furnished for use in the research Sponsor may place restrictions on the participation of foreign nationals in the research Sponsor may restrict the publication or disclosure of the research results You expect the physical export of controlled goods or technology 13

14 Export Regulations Exemptions Basic Research EAR 99 Public Domain Basic and Applied Research in Science and Engineering at Colleges and Universities Allows research to be conducted with the participation of foreign nationals Results may be disseminated without the need for a license Referred to as the Catch-All Category Includes goods and technology not covered by the 10 categories of the CCL Information is published Information is accessible to the Public Includes Fundamental Research at Universities Must be performed openly and without restrictions on publication, access or dissemination Applies only to the disclosure of technical data to foreign nationals within the USA Not applicable to shipments or disclosures outside the borders of the USA License required for embargoed countries, organizations or entities identified by the OFAC License required for End-users who are defined as denied persons Unlimited distribution and unrestricted access are required to qualify as Fundamental Research Must be performed at accredited institutions of higher learning in the USA Results must be published and shared with the Scientific Community 14

15 Penalties and Fines for Violations EAR Criminal up to $1M fine or 5x value of export, whichever larger, per violation; Imprisonment of up to 10 years for individuals Debarment from Federal Grants and Contracts Civil up to $120K per violation; loss of export privileges ITAR Criminal up to $1M per violation; Imprisonment of up to 10 years in prison for individuals Debarment from Federal Grants and Contracts Civil up to $500K per violation; loss of export privileges; seizure of item 15

16 University Example Russia and USA agree to jointly develop a satellite for non-military purposes The Defense Agencies of both countries are co-sponsoring the program The spacecraft will launch from a site in the former Soviet Union Comprehensive collaboration is planned between both countries Extensive foreign travel is planned over a period of at least 2 years A US university will complete final assembly in preparation for launch Finished satellite will be sent to launch site for integration and final QC Scientific personnel from both countries will meet at the launch site 16

17 Questions? John D. Sites, Jr., CRA Higher Education and Life Sciences, Huron Consulting Group Office / Mobile jsites@huronconsultinggroup.com 17